The True Cost of Federal Student Loans
July 31, 2022
The Education Department said the federal student loan program is generating billions in income for the federal government. A new report from the GAO shows that it is causing billions in lost revenue due to flaws in budget estimates.
The Education Department projected that student loans would generate $114 billion in income over the last 25 years. However, a new report shows that federal student loans have actually cost the government $197 billion, a $311 billion difference.
The findings come from a Government Accountability Office report released today that undermines a narrative from the department that the federal student loan program is generating income. The study, analyzing data on student loans between 1994 and 2021, found that the Education Department greatly underestimated how changes to loan programs and borrower behavior have impacted the federal student loan balance.